Samsung pays highest incentives to mobile, chip employees

By Kim Yoo-chul

Samsung Electronics said Sunday that the company paid its first-half incentives to employees, last week.

Those who work at its mobile, component and consumer electronics division were paid most with 100 percent of their monthly pay.

Samsung Electronics offers target achievement incentives (TAI) to employees twice a year in the first and second half. The amount of TAI differs according to business divisions as the incentives are based on performance.

Samsung pays TAI with four different levels ― A for 100 percent, B for 50 percent, C for 12.5 percent and D for zero percent.

Samsung’s second-quarter operating profit is expected to reach about $7 billion, which is the highest quarterly profit it has garnered in about two years. Samsung Electronics said in its preliminary earnings guidance. It will announce its divisional performance for the latest quarter in the last week of July.

“The second quarter was very impressive in terms of sales of the Galaxy S7. Employees at the mobile division were paid the most,” said an official, adding that the highest-level incentives given to employees at its semiconductor division were due to the division’s strong quarterly performance.

Samsung’s mobile division is expected to bring in 4 trillion won operating profit during the April-June period ― the first time that the division will break the “4 trillion won mark” since the second quarter of 2014. The estimated sale of the Galaxy S7 in the second quarter was about 16 million, said officials.

Tight supply and solid demand for NAND flash chips are cited as the key reasons for the lift in profits at the company’s semiconductor division.

There’s no doubt that its chip business will remain strong both in profits and sales by the end of this year.

Employees at Samsung Group’s other electronics affiliates such as Samsung Electro-Mechanics and Samsung Display, however, failed to get the A-grade due to weak sales.

“Samsung Electro-Mechanics received the B-grade and employees at Samsung Display were paid in line with the C-grade,” said another official.

Samsung Electro-Mechanics was under heavy restructuring with the company selling non-core businesses and cutting the number of executives to save fixed costs. Samsung Display is in the process of revamping its business structure focusing on OLEDs.